Reconnaissance Energy Africa has entered into a production sharing contract (PSC) and a joint venture agreement for the exploration and development of an offshore block in the Republic of Gabon.
The agreement is with the Republic of Gabon, its national oil company Gabon Oil Company (GOC), and joint venture partner Record Resources.
The PSC covers the 1,214-square-kilometre Gabon offshore Block C-7, which has been renamed Ngulu.
Under the terms of the joint venture, Reconnaissance will be the designated operator with a 55 per cent working interest, Record Resources will hold 20 per cent, GOC will have fifteen per cent, and the Republic of Gabon will hold a 10 per cent carried interest.
The block contains an existing oil discovery, the Loba field, which was drilled in 1976. The company stated the Loba field complex offers low-risk appraisal and development opportunities with the potential for near-term production of approximately 20,000 barrels per day.
The block is also described as having significant exploration upside from an inventory of 28 mapped prospects.
Brian Reinsborough, President and CEO of Reconnaissance Energy Africa, said the strategic entry into a producing basin diversifies the company's portfolio and provides a line of sight to near-term production and cash flow.
During the initial four-year term of the PSC, the company has committed to execute geological and geophysical studies, reprocess existing 3D seismic data, and drill one well on the block.